Managing cash within your business

An increasing number of payments in the UK are now done using debit or credit cards. However many small businesses still operate using the traditional cash in hand method. For this reason, it is important to understand how best to handle cash in a small business.

It is essential to invest time into training your staff with a proper cash handling policy.

What policies for handling cash should I consider?

1 - Regularly deposit from the cash register into a safe or secure location.

When it comes to keeping large volumes of cash you need to plan for any eventuality. You just never know who is around and what someone might be thinking. Why not remove this temptation and make sure that you take some of your cash to another location. That way if anyone does decide to steal it you will have the insurance of having money in another location.

2 - Have separate duties in the cash handling process.

Spread the load in terms of cash handling. Don’t just rely on one person and put all of your eggs in one basket. Instead, you would be wise to give different people different responsibilities in terms of handling of cash.

What security measures should I have in place?

You can reduce the risks of handling cash in your business by introducing – and sticking to – a few simple policies.

Cash handling is a risky business and one which you shouldn’t take lightly. With this in mind, it’s worth creating a few simple policies. Think of it as general rules to abide by when you’re leaving cash with other employees. Let’s start with perhaps the most obvious point of all:

Do background checks on employees

Enforce some kind of background check on an employee in your company - especially someone who is handling cash. It's important to establish if they are trustworthy and a background check can help you decide. This might mean going through their CV to check if everything is legitimate. Contact their references, they should be able to provide you an idea of what their character is like.

Don’t leave large amounts of cash with one person

As alluded to earlier, when handling cash with employees it’s crucial to spread duties amongst a few people - ideally 2 or 3. By doing this, you will reduce the risk if one person makes a mistake or worse. Make your cash secure with wider team involvement. You will feel much more relaxed by adopting this approach.

Record and monitor all discrepancies

Frequent small losses from the till might suggest a significant problem. If this is something you are beginning to notice then it would be in your best interest to create a system that records and monitors when small amounts are taken out. What might start out as insignificant might add up to something much bigger. Regular checks and monitoring is a great way to deter potential theft in your shop.

Block ‘slush funds’

It is quite common for employees to make up for any losses out of their own pocket if the till is short. But this may lead to confusion, as employees may then feel they can take cash out of the register for themselves if there are any cash surpluses. This is usually referred to as a slush fund and it is something you should try and avoid. The main reason for this is that it blurs boundaries in in terms of what is the business’s money and what is the employee’s money.

What do I do with fake banknotes and coins?

If you’re running a business involving cash transactions, it’s important to be prepared for occasions where you are faced with a counterfeit banknote. You should develop a company policy for what to do in those situations, and ensure all your employees are clear on what to do if they are presented with fake notes.

When you are a business handling a large amount cash it would be perfectly understandable if you were to encounter counterfeit notes. What is important is how you deal with this situation when it arises. You should develop a company policy that focuses on counterfeit money and how employees should conduct themselves when this appears in the till.

You might be asking yourself ‘How can I tell if a note is fake or not?’ Well there are a few basic ways you could do this. For instance, UV lamps and detector pens are a great way to see if something is fraudulent, if you suspect it might be. Simple visual and tactile checks are excellent, particularly for checking the brand new polymer £5 and £10 notes.

What to do if you have fake currency?

1 - Never put staff at risk of attack or injury – make sure your staff are trained to avoid confrontation and have the skills and knowledge to do so.

2 - Provide the Bank of England’s training materials – These are available free of charge, to help train your employees to spot counterfeit bank notes.

3 - Keep the suspected fake bank note or coin – If you suspect that a note a customer is paying you with is a forgery try and keep the note, but also ask for an alternative means of payment. You can then issue them with a receipt. You can always reimburse them through the Bank of England if the note is legitimate.

4 - Call the police promptly – They will either visit your premises to collect the counterfeit note(s), or ask you to take them to a police station at your convenience.

Securing your business's future

Almost two-thirds of small businesses are affected by employee theft in the UK. This is an incredibly alarming figure, and reinforces exactly why it is so important to implement policies and procedures when it comes to dealing with cash handling.

By ensuring your business operates with sensible cash-handling policies, and your employees know what to do in the event of being presented with fake bank notes, you reduce the risk of suffering consistent cash losses. Your business is your livelihood so why put it and yourself at risk.

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